In a surprising turn of events, a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, would now be valued at approximately $3 billion following SpaceX's agreement to acquire the company at a staggering $60 billion valuation. This development has brought to light a substantial missed recovery in crypto history. SpaceX, founded by Elon Musk, has announced its intention to purchase Cursor later this year for $60 billion or pay $10 billion if the full acquisition does not proceed, as part of its strategy to bridge the gap with competitors OpenAI and Anthropic in the AI coding tools sector.
The deal is particularly significant, given that xAI, the AI company merged with SpaceX, is currently lagging behind its competitors. The acquisition has been delayed due to SpaceX's planned initial public offering, which is targeting a $2 trillion valuation, with the $10 billion serving as a breakup fee. The investment in Cursor originated from Alameda Research, the trading firm founded by Sam Bankman-Fried, which invested $200,000 in Anysphere, the company behind Cursor, in April 2022.
This investment secured roughly 5% of the company at a $4 million valuation. However, following FTX's collapse and subsequent bankruptcy, the court-appointed estate sold the Cursor stake for the same $200,000 that Alameda had initially paid. The significant disparity between the sale price and the current valuation of $3 billion at SpaceX's $60 billion price tag translates to a substantial 15,000x return, which was realized by the buyer of the stake rather than the creditors.
This outcome has raised questions about the timing and handling of FTX's bankruptcy administration, particularly given Sam Bankman-Fried's arguments that the estate's rapid liquidation of assets destroyed billions in value. Bankman-Fried has suggested that if the estate had held onto the assets, including the Cursor stake, FTX's net asset value could have reached $78 billion.
The trajectory of Cursor, which launched its AI coding product in early 2023, is among the steepest in software startup history. While FTX customers have been reimbursed in full, the missed opportunity for additional recovery, such as the $3 billion from the Cursor stake, is likely to be a point of contention in the ongoing discussions about the bankruptcy and its handling.